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Five Ways to Win with Digital Platforms

Many new platforms will fail, but small businesses and traditional
incumbents can succeed by taking five steps

Overview

Digital platform companies are transforming the way we do business by creating
vast markets, compelling customer experiences and new ways to
innovate. But how will small and traditional companies find success in a
platform landscape dominated by digital born companies?

Accenture’s latest research shows that platform businesses are proliferating in many countries…Small enterprises and
large industry incumbents are actively establishing platforms. But our
analysis in collaboration with the G20 Young Entrepreneurs’ Alliance
suggests most new platform businesses will likely fail. And many major
economies lack the enabling factors they require to help platform
enterprises flourish.

We identify the critical platform success factors for businesses and
policy makers.

Watch and listen to the views of industry experts and business leaders

Digital platforms: What do young entrepreneurs think of the platform economy?

Digital platforms are not just the preserve of digital-born companies and Silicon Valley start-ups. Entrepreneurs and SMEs are starting platforms in a range of industries. But Accenture research shows the majority of new platforms will fail. What opportunities do leading entrepreneurs see in digital platforms? And what is standing in their way?

Entrepreneurs speak to the digital platform opportunities for small businesses

Digital platforms are becoming more common for a range of businesses including small enterprises. What do entrepreneurs need to do to embrace platforms? How can small businesses provide quality platform experience? Listen as SMEs examine the challenges for small companies starting digital platforms and how to achieve success with them.

Digital platforms: How can entrepreneurs succeed?

What can entrepreneurs and small businesses learn from Airbnb, Alibaba or Amazon? How can they compete on these platforms? How can they set up platforms of their own? Professor Marshall van Alstyne, author of “Platform Revolution: How Networked Markets are Transforming the Economy–And How to Make Them Work for You”, explains.

Digital platforms: Are you a product business or a platform business?

What is the difference between traditional product businesses and new digital platforms? Professor Marshall van Alstyne of Boston University explains how platform companies create value outside the business and why this transforms the economics of doing business.

Digital platforms: Can Europe succeed?

The US, China and India will dominate the platform economy. Marshall van Alstyne of Boston University explains why many European countries will lag behind. He explains what Europe can do to overcome the market fragmentation that is holding it back from winning with digital platforms.

Digital platforms will drive cross-border e-commerce for SMEs

Against a weak outlook for growth in international trade, the prospects for cross-border e-commerce are strong. We spoke with Diane Wang - the driving force behind DHgate.com, one of China’s leading B2B e-commerce platforms - to explore the opportunities.

Digital platforms: What do young entrepreneurs think of the platform economy?

Digital platforms are not just the preserve of digital-born companies and Silicon Valley start-ups. Entrepreneurs and SMEs are starting platforms in a range of industries. But Accenture research shows the majority of new platforms will fail. What opportunities do leading entrepreneurs see in digital platforms? And what is standing in their way?

Entrepreneurs speak to the digital platform opportunities for small businesses

Digital platforms are becoming more common for a range of businesses including small enterprises. What do entrepreneurs need to do to embrace platforms? How can small businesses provide quality platform experience? Listen as SMEs examine the challenges for small companies starting digital platforms and how to achieve success with them.

Digital platforms: How can entrepreneurs succeed?

What can entrepreneurs and small businesses learn from Airbnb, Alibaba or Amazon? How can they compete on these platforms? How can they set up platforms of their own? Professor Marshall van Alstyne, author of “Platform Revolution: How Networked Markets are Transforming the Economy–And How to Make Them Work for You”, explains.

Digital platforms: Are you a product business or a platform business?

What is the difference between traditional product businesses and new digital platforms? Professor Marshall van Alstyne of Boston University explains how platform companies create value outside the business and why this transforms the economics of doing business.

Digital platforms: Can Europe succeed?

The US, China and India will dominate the platform economy. Marshall van Alstyne of Boston University explains why many European countries will lag behind. He explains what Europe can do to overcome the market fragmentation that is holding it back from winning with digital platforms.

Digital platforms will drive cross-border e-commerce for SMEs

Against a weak outlook for growth in international trade, the prospects for cross-border e-commerce are strong. We spoke with Diane Wang - the driving force behind DHgate.com, one of China’s leading B2B e-commerce platforms - to explore the opportunities.

ACHIEVING PLATFORM SUCCESS

Platform companies have generated market capitalization of more than US$4 trillion. Between 2010 and 2015, more than US$20 billion was invested globally in digital platforms for the online marketplace and financial services sectors alone. But these big figures mask the variety of new enterprises that are enjoying significant success with platforms in a range of industry sectors.

Platform success is underpinned at two levels: Entrepreneurs and incumbents must create the critical building blocks to establish platform ecosystems that are able to satisfy demanding customers and sustain rapid scale expansion. Meanwhile, governments play a role in creating the right environment enablers—factors and conditions within the broader economy that are necessary for platforms to emerge and grow. These are illustrated in Accenture’s Platform Economics Model.

Digital user size
and savviness

Digital talent and
entrepreneurship

Technology and governance

Open innovation
culture

Policy and
regulation

1. Digital user size and savviness

A large base of digitally-savvy consumers and businesses. Scale can benefit from cultural and lingual uniformity, but diversity is also a strength.

2. Digital talent and entrepreneurship

A supportive business environment with limited red tape, good access to finance and a mature exit market. A need for both hard technical skills and softer, digitally creative skills.

3. Technology and governance

High speed connectivity for both businesses and consumers; and differentiated proprietary technologies to support relevant local services.

4. Open innovation culture

Businesses must be willing to partner with 3rd parties outside their sector and to share IP and data as part of more dynamic innovation.

5. Policy and regulation

Proactive and participative policy making, working with platform players on complex areas, such as data privacy or blockchain and cybersecurity.

FIVE FACTORS FOR A SUCCESSFUL PLATFORM ECOSYSTEM

There is no “one size fits all’ model for digital platforms. But there are five critical elements that ensure a dynamic ecosystem can reach critical mass and deliver new value at scale. Businesses should consider these as essential steps, whether they are platform
owners, digital partners or merchants and suppliers targeting new customers:

Proposition

Create a compelling offer based on modular solutions that address the range of customers’ needs.

Personalization

Focus on the user journey by targeting individuals with tailored experiences that support customers well beyond any one transaction.

Price

Engage participants through sophisticated, dynamic pricing models that are more responsive to changing market demand.

Protection

Build trust beyond high levels of security and privacy by committing to prevention and compensation measures.

Partners

Collaborate with digital partners, app developers or providers of payment services and other capabilities that make the platform robust and differentiated.

Δ Open innovation: Poor levels of digital innovation by large and small companies.

There is a link between the health of the platform enablers prevalent in a country’s economic and social environment and the levels of local investment and activity in digital platforms.
Our research shows that G20 countries vary
significantly in their ability to encourage the
flourishing of platform businesses. Countries
with the highest platform readiness – China,
the United States, India, the United Kingdom and
Germany – look certain to keep their lead as
other economies struggle to put in place the
right measures.

The United States and Asia are in a strong
position to succeed, particularly thanks to vast
populations of digitally savvy customers. But
many parts of Europe are held back by the
continent’s fragmented digital market and its
inconsistent levels of entrepreneurial and
innovative culture.

RECOMMENDATIONS FOR POLICY MAKERS

Five steps are critical to create the environmental enablers that
support the local creation
and expansion of digital platforms.

Ensure
interoperability

Harmonize privacy and
data security rules
between jurisdictions to
reduce costs and facilitate
data sharing that is the
lifeblood of platforms.

Regulate for
innovation

Ensure regulations that
protect consumer and
producer interests do not
stifle innovation or prevent
market disruption.

OUR PERSPECTIVE

Digital platforms are not simply a fresh route to growth and efficiency. They are more significant than
that. A century ago, the mass production factory emerged as the analog platforms of the day,
bringing together workers, machines and suppliers. Modern factories transformed the wider
economy and society. The impact of digital platforms could be as profound, changing the way we
produce, work and consume. Platform businesses are therefore not an option. They are an
imperative for all enterprises and governments to embrace.

Laurence Morvan

Managing Director
Accenture

Francis Hintermann

Global Managing Director
Accenture Research

Madhu Vazirani

Thought Leadership Principal Director
Accenture Research

ABOUT

About the Research

Accenture undertook research and analysis on behalf of the Young
Entrepreneurs’ Alliance between January and June 2016. The research
program comprised in depth interviews with 50 leading experts,
academics, platform owners and service providers. The Platform
Readiness Index is a proprietary model covering 16 G20 countries and
takes into account 30 quantitative indicators. The program also included
a survey of more than 100 small and medium sized business in China.

About Accenture, the B20 and the G20 YEA

In addition to being a knowledge partner of the G20 Young Entrepreneurs’ Alliance, Accenture is a knowledge partner and co-chair of the B20 SME Development Taskforce chaired by Jack Ma, Executive Chairman of Alibaba Group. The B20 brings together business leaders and policy makers to help shape policies that address critical issues for enterprises - including economic, social and financial issues – raised by the G20.

At this year’s B20 in China, Accenture contributed to the development of the B20 Policy paper which addressed the opportunity for SMEs to find growth through cross-border e-commerce (see below).

Digital platforms are forging countless connections among consumers, citizens, suppliers, retailers, manufacturers and product developers. See how you can prepare your business for platform-based operations.

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